Sears Canada Announces Possible Partial "Spin-Off" by Sears Holdings

Canada NewsWire

TORONTO, May 17, 2012

TORONTO, May 17, 2012 /CNW/ - Sears Canada Inc. (TSX: SCC) ("Sears
Canada" or the "Company") announced today that Sears Holdings
Corporation ("Sears Holdings"), which holds approximately 95% of Sears
Canada's common shares, has advised it that Sears Holdings' board of
directors has approved plans to pursue a distribution (on a pro rata
basis to its stockholders) of a portion of its holdings in Sears Canada
such that, immediately following the spin-off, Sears Holdings would
retain approximately 51% of the issued and outstanding shares of Sears
Canada. Sears Holdings has indicated that subsequent to the spin-off,
it may sell, hold or distribute to holders of Sears Holdings' common
stock any portion of its remaining interest in Sears Canada.

Sears Canada expects that the proposed distribution by Sears Holdings
would, if completed, be anticipated to increase the public float and
potentially the liquidity of Sears Canada shares. In connection with
the distribution, Sears Canada is expected to file documents with the
United States Securities and Exchange Commission and the Canadian
Securities Administrators.

"We are looking forward to working with Sears Holdings on its plan to
pursue a partial spin-off of its shares in Sears Canada. While we have
benefited from a close relationship with Sears Holdings, we believe
this distribution would provide an increased focus on our performance
as an independent company and enhance the liquidity of holders of Sears
Canada's common shares," said Calvin McDonald, President and Chief
Executive Officer, Sears Canada Inc.

The transaction would be subject to, among other things, obtaining
required regulatory approvals. This press release does not constitute
an offer of any securities for sale.

This release contains information which is forward-looking and is
subject to important risks and uncertainties. These forward-looking
statements include, but are not limited to, statements regarding the
occurrence and form of any distribution of Sears Holdings' interest in
Sears Canada. Whenever used, words such as "will," "expect,"
"anticipate" and other terms of similar meaning are intended to
identify such forward-looking statements. Factors which could cause
actual results to differ materially from current expectations include,
but are not limited to: general economic conditions; competitive
conditions in the businesses in which Sears Canada participates; Sears
Holdings' decision not to pursue the distribution or to change the
structure or terms of any distribution, the ability to obtain required
regulatory approvals to facilitate the distribution (assuming that it
proceeds); and changes in laws, rules and regulations applicable to
Sears Canada and Sears Holdings. There can be no assurance as to the
timing of the distribution, whether it will ultimately be structured as
a spin-off or whether it will be completed. While Sears Canada believes
that its assumptions are reasonable, results or events predicted in
this forward-looking information may differ materially from actual
results or events. Sears Canada intends the forward-looking statements
to speak only as of the time made and, except as required by law, do
not undertake to update or revise them as more information becomes
available.

Sears Canada is a multi-channel retailer with a network that includes
196 corporate stores, 278 hometown dealer stores, 29 home services
showrooms, over 1,500 catalogue and online merchandise pick-up
locations, 105 Sears Travel offices and a nationwide home maintenance,
repair, and installation network. The Company also publishes Canada's
most extensive general merchandise catalogue and offers shopping online
at www.sears.ca